Question: I am a 57 yr old underweight female with a history of controlled asthma and allergies who is mostly healthy. Because of these risk factors, I want to know if underwriting success is higher for a high deductible/low premium plan vs a low deductible/high premium plan. I want to apply for plans with the lowest risk of being declined.

Answer: Generally, the probability of being accepted for coverage is improved by choosing a higher deductible plan. There are some variations to the risk assessment with every carrier. The frequency and number of prescriptions, along with any other risk factors will affect the final underwriting decision regardless of the chosen deductible. I suggest, you call our individual underwriting specialist, Erin, at 800-557-5693 and go over your medical history with her. She can determine where you will be treated the most favorably.

Question: I’m approaching at 65 and my employer is strongly encouraging me to cancel my group coverage and elect Medicare coverage only. Can they do that?

Answer: Yes, your employer can “strongly encourage” you to take Medicare coverage when you become eligible. It’s important that you understand that your employer has been paying at least $500 a month to provide health insurance for you. Medicare will cost $100 per month. Perhaps you could negotiate a reimbursement for the Medicare Part B premium of $100 and an additional $130 - $150 per month for a Medicare Supplement - total cost to your employer is $250 per month and you get virtually 100% coverage. This advice applies only to group health plans with less than 20 employees where Medicare is the primary payor and the group health plan is secondary.

In larger groups, Medicare is the primary payor and there are rules that forbid employers from targeting Medicare-eligible employees by providing incentives (financial or otherwise) for them to drop employer coverage in favor of Medicare. As one of our readers, Chris Anderson of Sylmar, CA, pointed out: “The Centers for Medicare and Medicaid Services (CMS), formerly known as the Health Care Financing Administration (HCFA), has confirmed this prohibition many times, and employers should note that CMS may assess a penalty of up to $5,000 for each violation. An employer cannot offer, subsidize, or be involved in the arrangement of a Medicare supplement policy where the law makes Medicare the secondary payer. Even if the employer does not contribute to the premium, but merely collects it and forwards it to the appropriate individual’s insurance company, the GHP policy is the primary payer to Medicare.”

Question: Can an employer set up an hra with no group health insurance?

Answer: Yes. Companies that want to offer health benefits, but cannot offer group health insurance due to high cost or participation requirements can offer a defined contribution health plan in which they make available monthly contributions that employees can choose how to spend. Employees can use their monthly contribution amount to reimburse their individual health insurance costs and eligible medical expenses. This is just one of many HRA design options.

Question: i am adding a person with a pre-existing medical condition on my group policy…will they be accepted?

Answer: Yes. In 1996, Congress passed the Health Insurance Portability and Accountability Act (HIPAA). This law mandated nationwide, across-the-board guaranteed issue in the small group market - among other things. A small group is defined as an employer group with 2-50 employees. However, insurance companies may charge higher premiums for groups that contain high risks or that have had a history of high claims. In some states, the premium for high-risk groups can be much higher.